The Greek crisis is about Democracy not Debt

It is interesting that Greece, the cradle of democracy is now having to defend that very concept in the face of an onslaught from the corporate masters of the global economy. With the Greek referendum vote, the issue in Greece has escalated from an economic crisis, to a crisis of democracy.

As Caroline Lucas has said:

“The Greek people have made a decision which must now be respected. This referendum has seen EU states do their very best to undermine the democratic will of the Greek people but it’s time to draw a line under the past and move onwards”.

We cannot argue that former Greek governments, both of the right and left, badly managed the Greek economy. The EU and international finance were complicit in making this bad situation worse by failing to ensure that further loans to Greece were used for investment and did not end up lining the pockets of the wealthy. But the neo-liberal ‘free-market’ policies that dominate world finance want and need debt and Greece was encouraged to increase its debt rather than address tax avoidance and increase Government revenue.

By crippling Greece with debt, international financiers have been able to force her Government to sell assets to the private sector. They have also ensured that the bulk of Greek revenue goes to debt repayment, that is, to the private sector financiers, rather than to the welfare of the Greek people. Debt has become a commodity; it is traded and used by the private sector to increase personal wealth. Neo-liberal economics needs debt to create money and wealth. By loading governments with debt the financial institutions can divert tax payers’ money away from social provision and state investment in to their own coffers as interest repayments. For these institutions, cfreating debt is good business and leads to hugh personal bonuses.

The Greek crisis is not really about debt but about repayments. Debt is now a corporate asset, if a borrower defaults, then the asset becomes valueless. This was the root of the 2008 financial crisis. If Greece defaults it is the big financial institutions that will be hit, and they are using austerity to protect their interests. They are demanding that money that should go to support the welfare of citizens goes instead to themselves. So the people of Greece must suffer in order to protect the assets of the wealthiest institutions and people in the world.

The interests of money and international finance are being put ahead of the needs of people – this is a democratic crisis. What are Governments for, to serve the people or international finance?

Molly Scott Cato, Green MEP for the South West, said:“This referendum has provided an opportunity for all EU states to reflect on the balance of power between finance markets and democratic governments”.

This isn’t just a Greek crisis, it affects us all. The Conservative Government is determined to continue with its austerity measures in order to pursue its privatisation agenda and to reward its supporters with tax breaks. Austerity is not about sound economics, it is an ideology driven by the neo-liberal free-market. It is being driven by the corporate sector that has effectively hijacked governments. The rich and the powerful are once again driving the political agenda in their own interest and are ignoring the needs and wishes of people. They are challenging the very concept of Democracy.

The Greek people have raised their voices and have demanded that their government listen to them and address their needs, as they should in a Democracy. There are solutions to the Greek debt crisis and part of that solution is to recognise that some of the debt is un-payable.

Caroline Lucas has pointed out that there is a historic precedent for this:“History shows us that countries can escape crippling debt in a just way. In 1953, at the London Conference, Greece was among the European nations signing a deal which allowed for the cancellation of German debt, to enable the country to grow again after the destruction of the Second World War. Europe needs to come together to offer the Greeks a deal which allows their country to be rebuilt.”

But the difference then was that the debt wasn’t a corporate asset; Governments weren’t controlled by big business. It is essential now for the Governments of Europe and America to address the debt crisis and to be seen to be standing for the interest of the people and not spinelessly bowing to the pressures of the global corporations. This is the demand from Molly and the European Greens:“We now urgently need to see a conference to address the issue of Greece’s debt with restructuring and debt relief a clear outcome. There also needs to be clear support for rebuilding the economy, especially by investing in sustainable sectors of the economy”.

Further, we now need to see Governments acting as part of democracies, in deed and not just in word; to listen to the calls coming from their people for economic justice and for the gross inequalities in society to be leveled off. If they fail to do this, the global corporate sector will be triumphant and democracy will be effectively dead.